Gas demand rises to 2040 in Australia net zero GHG plan
Australian LNG exports and domestic gas demand will rise until 2040 before weakening under the current federal government's net zero greenhouse gas (GHG) emissions by 2050 plan, while the value of thermal coal shipments will fall by 50pc in the long term.
If countries take action to achieve their 2030 and 2050 GHG reduction targets, there will be a corresponding fall in global demand for traditional energy sources, the Australian government said in its long-term emissions reduction plan. "This reduced demand will impact Australian production, as Australia is a major exporter of traditional energy sources such as coal and gas. The outlook for gas is more positive, with demand projected to grow until 2040 before turning lower," it said.
Australia is the world's largest LNG exporter and shipped around 78mn t last year. A separate report related to Australia's GHG reduction policy forecast the country's LNG exports will rise to 86mn t/yr by 2030. GHG emissions from Australia's LNG output were around 7.1pc of Australia's total emissions of the 529mn t emitted in 2019.
Australia's thermal coal production under the latest modelling scenario will be mainly for export, as the domestic electricity sector decarbonises under all scenarios, the report said. Australia is the world's second-largest thermal coal exporter and the largest coking coal exporter. More than 60pc of the electricity generated in east Australia comes from coal-fired power plants.
But the shift to a lower GHG emissions-intensive economy will be overall positive with the mining sector to expand by 2050, reflecting increased demand for critical minerals and other mining activity, the report said. This shift is projected to occur over several decades, with the biggest impact beyond 2030 as countries make progress towards their decarbonisation goals. Increases in other mining activity are projected to more than offset expected falls in coal and other traditional energy sources.
The Australian mining and resources sector will be boosted by producing and exporting the minerals needed for low-emissions energy technology like cobalt, copper, lithium, nickel, uranium and rare earth elements, as well as potential demand for hydrogen and construction work in the renewables energy sector, the report said.
Australia does not actually reach net zero by 2050 of its own accord, under all scenarios in the modelling report. Itis highly reliant on meeting the target, which is not intended to become law, through carbon offsets from domestic and international sources.
| Australia GHG emissions, offsets under all scenarios | (mn t CO2e) | ||||||||
| 2005 | 2020 | Pre-Cop 26 | No Australian plan | The plan | net zero emissions (NZE) 100% | NZE with offsets | NZE no trade | NZE no offsets | |
| Marginal abatement incentive Australia (A$/t) | n/a | n/a | 0 | 2 | 24 | 80 | 100 | 170 | 400 |
| Electricity | 197 | 172 | 39 | 20 | 18 | 17 | 17 | 15 | 13 |
| Stationary energy | 82 | 103 | 89 | 95 | 69 | 65 | 88 | 85 | 78 |
| Industrial | 47 | 44 | 65 | 65 | 47 | 27 | 54 | 49 | 41 |
| Fugitive (mining) | 41 | 53 | 39 | 28 | 25 | 21 | 23 | 21 | 15 |
| Transport | 82 | 94 | 70 | 70 | 39 | 31 | 57 | 52 | 41 |
| Agriculture | 86 | 72 | 82 | 80 | 55 | 39 | 54 | 47 | 32 |
| Land (net) | 89 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total emissions | 624 | 536 | 383 | 358 | 253 | 200 | 293 | 268 | 219 |
| Bioenergy, carbon capture and storage | 0 | 0 | -11 | -42 | -38 | -43 | -54 | -64 | -84 |
| Direct air capture | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -132 |
| Emissions before offsets | 624 | 536 | 372 | 316 | 215 | 157 | 239 | 205 | 3 |
| Domestic offsets | n/a | -25 | -8 | -8 | -27 | -63 | -78 | -204 | -3 |
| International offsets | 0 | 0 | 0 | 0 | -94 | -94 | -161 | 0 | 0 |
| Net emissions | 624 | 512 | 364 | 308 | 94 | 0 | 0 | 0 | 0 |
| Source: Australia government | |||||||||
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